Tag Archives: APA Group

New Century Resources and Senex Energy agree on natural gas supply pact

Senex Energy Ltd has announced a sales agreement involving around 7 PJ of natural gas over three years with New Century Resources Ltd.

New Century, which owns and operates the Century zinc mine in Queensland, Australia, will receive this natural gas supply from the Diamantina Power Station in Mount Isa (owned and operated by APA Group), with the 7 PJ being enough to operate the mine, it said.

Under the three-year agreement starting January 1, 2022, Senex will provide around 7 PJ of natural gas to support New Century’s processing operations at a fixed price, in line with current market levels. Senex will further supply around 1 PJ of additional natural gas at New Century’s election by mid-2022 in support of material increases in production levels associated with the potential development of existing in-situ deposits at Century.

Senex Managing Director and CEO, Ian Davies, said: “Century Mine generates significant state royalties and export earnings and is a critical project in the Queensland Government’s Strategic Blueprint for the North West Minerals Province.

“Senex also acknowledges APA as an important part of the value chain delivering energy to Mount Isa.”

Alltype Engineering gassed up in Western Australia

WestStar Industrial’s engineering construction contracting business, Alltype Engineering, has been awarded contracts to a total value of circa-A$8 million ($6 million) across multiple clients and projects, including A$5 million of contracts in gas transmission.

APA Group has contracted Alltype to deliver multiple gas offtake and metering facility projects throughout the Midwest region of Western Australia. These turnkey multidiscipline projects involve civil, structural, mechanical, piping, electrical and instrumentation scopes, both workshop and site, with remote area working conditions and logistics and eight off-workshop fabricated gas skids to be completed off site.

Included in the projects are a gas lateral offtake and metering station for the Beyondie sulphate of potash project (pictured), a gas lateral offtake and metering project for the Lakeway SO4 potash project, and gas lateral offtake and metering work for Capricorn Metals’ Karlawinda gold project.

WestStar is also scheduled to build a gas lateral metering station for Primero Group at the Kalium Lakes potash project.

WestStar said: “These newly awarded contracts for Alltype continue to demonstrate its strength and reliability in working successfully with APA and the Australian gas industry, including both upstream and downstream projects.

“Furthermore, having fabricated, assembled and FAT tested over 20 modularised gas skid process packages in the last two years, Alltype continue to leverage off this experience and knowhow to fast track aggressive timeline projects with full supply chain control.”

Alltype has commenced the works for APA Group, which are planned to be completed by the March quarter of 2021.

In addition to this work, Alltype says it was awarded its first contract from Newmont at the Boddington gold mine, also in Western Australia. This contract had an aggressive timeline for completion of urgent fabricated plate and piping componentry for a shutdown, which was achieved. The balance of works is in the process of being completed, it noted.

Still in Western Australia, Alltype says it continues to provide goods and services for the three major iron ore developments in the Pilbara, being BHP South Flank, Rio Tinto Gudai-Darri and FMG’s majority-owned Iron Bridge project.

Solar and gas power to energise Gruyere gold mine expansion

APA Group has been contracted to expand the power generation capability of the Gruyere gold project, in Western Australia, as part of a contract that will include the addition of a renewable energy hybrid microgrid, solar power and battery energy storage system.

This news came within Gold Road Resources Limited’s and Gruyere Mining Company’s report on power expansion initiatives at Gruyere, a 50:50 joint venture between Gold Road and Gold Fields, around 200 km east of Laverton.

APA has been contracted to install an additional 4 MW reciprocating gas-fired engine by mid-2021 (Phase 1) and build, own and operate a 13 MWp solar farm and 4.4 MW battery-energy storage system by the end of 2021 (Phase 2) under the existing Electricity Supply Agreement (ESA) that runs until November 2033.

The cost of the Phase 1 and Phase 2 expansion will be amortised over the term of the ESA and is forecast at A$32-38 million ($24-28 million). Phase 1 and Phase 2 will increase the installed power capacity at Gruyere to 64 MW.

The benefits of the sustainable power expansion at Gruyere include:

  • Reduction of carbon emissions by an estimated 16,000 t/y CO2-e;
  • Anticipated 5% power supply unit cost saving (MWh), at current gas market prices;
  • Ameliorating gas power generation capacity constraints, including the derating of gas engine performance at high ambient temperatures;
  • Enable increased plant throughput up to the target of 10 Mt/y;

Gold Road Managing Director and CEO, Duncan Gibbs, said: “Gold Road is proud to be part of this green energy initiative. We have long stated our intention to be an ESG leader, and this initiative follows on from the recent commissioning of a solar and battery power solution at our Yamarna exploration facility.

“The power expansion at Gruyere provides an elegant technical solution that reduces greenhouse gas emissions, decreases costs and enables an increase in plant capacity up to a targeted 10 Mt/y from the current nameplate design of 8.2 Mt/y. This will not only see increased annual cash flow generation for the business, but it will help drive additional unit cost reductions as Gruyere is further defined as a Tier One, low cost and long-life gold producer.”

Gold Fields Executive Vice President, Stuart Mathews, said: “The installation of renewables as part of our total power solution at Gruyere reflects Gold Fields’ strategic objective to strengthen energy security, optimise energy costs and reduce our carbon footprint through the adoption of innovative new technologies. The success of the recently completed renewable energy projects at our Agnew and Granny Smith mines has given Gold Fields the confidence to ramp up use of these technologies across our global operations.”

MACA receives early call up for Red 5’s King of the Hills gold project

Red 5 Ltd says it has taken another key step towards the development of its King of the Hills (KOTH) project in Western Australia, after issuing a notice of award for the engineering, procurement and construction (EPC) contract and the bulk earthworks for the process plant to MACA Interquip.

The EPC contract and bulk earthworks – which encompass the KOTH processing facility, equipping of the bore fields, high voltage power distribution, workshop, warehouse and bulk earthworks – will be undertaken as a fixed‐price contract, Red 5 said.

The KOTH feasibility study outlined a 16-year life of mine plan from open-pit and underground mining, whereby the company would produce 176,000 oz/y of gold over the first six years. The capital cost came in at A$226 million ($158 million) and life of mine all-in sustaining costs were A$1,415/oz.

MACA Interquip, a multi‐disciplined mineral processing provider, has a strong track record of the construction of similar carbon‐in‐leach processing plants to the 4 Mt/y process plant planned at KOTH, Red 5 explained.

Following execution of the EPC contract, commitments to‐date for the KOTH project will total A$143 million, compared with the capital budget of A$155 million for these items – which represent 82% of the total capital budget for processing infrastructure of A$188 million (excluding owners costs and contingency).

Commitments made to date include:

  • Purchase of 240‐bed camp accommodation, water and waste water treatment plants and central facilities;
  • Design and construction contract for a 450‐person village;
  • 6 Mt/y gyratory crusher and 4 Mt/y SAG mill;
  • Early works agreement with APA Group for the gas pipeline lateral; and
  • EPC contract for the process facility and bulk earthworks.

Construction of the village commenced in October 2020 and is on track to be operational in February 2021. The process plant bulk earthworks (for which equipment will be mobilised) are scheduled to commence on December 1, 2020, pending the final remaining permit (currently on schedule).

The EPC contract provides for two phases. The first is limited to A$50 million and Phase 2 is for the remainder of the contract value, which will be released at the discretion of Red 5, based on the status of debt financing.

The notice of award provides for the immediate commencement of the design and procurement activities for the process plant as well as mobilisation of earthmoving equipment to site, Red 5 said. It, however, limits commitments to A$10 million and is an interim measure to allow the plant design and mobilisation for earthworks to commence immediately while the contract is executed.

Once executed, the value of these contracts, together with the purchase of the 6 Mt/y gyratory crusher and 4 Mt/y SAG mill (already awarded to MACA Interquip), is A$129 million.

The purchased long‐lead items of the crusher and mill are currently being transported, in preparation for the planned delivery to Australia late in the June quarter of 2021.

The company is currently calling tenders for both the open pit and underground mining contracts, the independent power producer contract and the supply of gas. These contracts are expected to be finalised in the coming months, it said.

Red 5 Managing Director, Mark Williams, said: “Our decision to award these key contracts and make commitments to significant long‐lead items prior to completing project debt funding reflects our confidence in the robustness of the King of the Hills project.

“Importantly, the commitments made to date are below budget for this stage of the KOTH project, and should give our stakeholders confidence that we are well on track to progress the development of this major project, with production planned to start in June quarter of 2022.”

Technology Metals Australia shores up gas supply for Gabanintha vanadium project

Technology Metals Australia (TMT) says it has entered into a non-binding Memorandum of Understanding (MoU) with APA Group under which TMT and APA have agreed to investigate the provision of gas transportation services along a new gas pipeline to be developed by APA from the south to supply gas to the Gabanintha vanadium project, in Western Australia.

In return, TMT would enter a take or pay tariff over an agreed period linked to the life of the project.

The proposed new pipeline is shorter than the gas pipeline contemplated in the Gabanintha definitive feasibility study (DFS) and is, therefore, expected to deliver material operating cost savings from lower gas transportation charges than those included in the study, the company said.

TMT and APA have agreed to an exclusivity period on negotiation of the gas transportation services for the term of the MoU during which they will negotiate and endeavour to agree the transaction documents.

TMT Managing Director, Ian Prentice, said: “We are very pleased to have entered into this agreement with APA on the development of a proposed new gas pipeline; providing low risk delivery of gas to the project, cost reductions compared to the DFS as well as the opportunity to source gas from the significantly closer emerging Perth basin gas fields.

“APA is a leading Australian energy infrastructure business with 20 years’ experience in building, owning and operating gas pipelines. We will be working together to develop a reliable energy solution for the Gabanintha vanadium project. This represents another key milestone as we progress the development of this lowest cost quartile, large scale, long-life world-class vanadium project.”

The DFS for the Gabanintha vanadium project proposes using natural gas as the heating energy in the roasting kiln and other parts of the process circuit and for electricity generation. The project’s expected maximum and average daily consumption of natural gas is 10.67 Tj and 6.28 Tj, respectively.

The location of proposed new pipeline, which is designed to come from a point to the east of Mt Magnet and extend around 152 km north to the project, is expected to enhance the opportunity for TMT to secure cost competitive gas supply from the rapidly emerging Perth Basin, with potential to further reduce gas transportation charges for the project, the company said.

The Gabanintha DFS outlined an operation with a 16-year-plus mine life, operating at an average vanadium pentoxide production rate of 27.9 MIb/y. This came with a pre-production capital cost of $318 million and operating costs of $4.04/Ib of V2O5.

Capricorn Metals secures gas power for Karlawinda gold project

Capricorn Metals says it has entered into agreements with APA Group for the transportation of gas from the Goldfields Gas Pipeline (GGP) to the Karlawinda gold project, in Western Australia.

As part of the agreement, APA will also build, own and operate the lateral pipeline that links the GGP to Karlawinda. It is expected that some 3 Tj/d of gas will be transported through the pipeline for power generation at Karlawinda.

Capricorn has also recently executed a power supply agreement with Pacific Energy subsidiary Contract Power Australia where, under the terms of the agreement, Contract Power will build, own and operate a 16 MW gas-fuelled power station with 2 MW of diesel back-up at Karlawinda.

Based on a 1.2 Moz reserve, Capricorn envisages a 12-year mine life at Karlawinda, with an annual production target of 105,000-120,000 oz of gold. The company plans to mine a single large, low strip ratio open pit and use a 3.5-4.0 Mt/y carbon-in-leach processing plant.

Development of the project is underway, with commissioning expected in the March quarter of 2021.

Capricorn Executive Chairman, Mark Clark, said: “We look forward to a successful long-term partnership with these high-quality companies to meet our energy requirements. The completion of these contracts, combined with the current low price of gas in Western Australia, present Capricorn with a very attractive cost of power generation for the operation of the Karlawinda project.”

Kalium Lakes secures gas supply and transport for Beyondie SOP project

Kalium Lakes has secured key contracts with APA Group and Shell Energy Australia for the transportation and supply of gas to meet the requirements of its Beyondie sulphate of potash project (BSOPP), in Western Australia.

These contracts will provide 1 Tj/d of gas to produce 90,000 t/y of SOP and also allows for expansion to support increased production and production of magnesium by-products, according to Kalium Lakes.

Shell Energy’s gas will be used at the BSOPP site for power generation, steam generation and product drying during operations, while APA Group’s 88.2%-owned Goldfields Gas Pipeline (GGP) will transport and deliver gas via a new, purpose built metering and connection facility. Early works have commenced with APA on the design of the new metering facility.

These contracts – and others, such as ones associated with engineering, procurement, construction management and commissioning – are subject to a final investment decision (due shortly) and subsequent notice from Kalium Lakes that it is ready to commence commissioning and production operations, the company said.

Kalium Lakes’ Chief Development Officer, Rudolph van Niekerk, said: “The close proximity and ease of access to the GGP offers significant cost advantages to the BSOPP, which has allowed Kalium Lakes to own and operate its own gas pipeline, spur and gas fired power station with funding provided by the Northern Australia Infrastructure Facility.

“Importantly, the award of the gas supply and gas transport operations contracts to Shell and APA are also within the budget allocated in the BFS and FEED outcomes. We can now also confirm that approximately 50% of our FOB cash operating costs have now been locked in, again on budget.”

The BSOPP project aims to commence production at 82,000 t/y of SOP in 2020, before ramping up to 164,000 t/y of SOP for domestic and international sale. An initial mine life of between 30-50 years is anticipated for a project designed to be a low cost, long life and high margin producer, it said.

More gas for APA Group in Goldfields region of Western Australia

APA Group has executed an agreement to extend and expand gas services to an existing customer in the Goldfields region of Western Australia.

Under this agreement, gas will travel over 1,200 km across the energy infrastructure business’ West Coast Grid.

The expansion contract is expected to generate some A$45 million ($32 million) of revenue, of which A$21 million is renewal revenues, over the five-year agreement period, starting in November.

APA said the contract is the most significant of three it has entered into to support the expansion of the Murrin Murrin Lateral, a transmission pipeline located in south Western Australia that is 84 km in length and has a capacity of 45.6 TJ/d. It connects the Goldfields Gas Pipeline to the Eastern Goldfields Pipeline, which then connects to the Sunrise Dam, Tropicana and Granny Smith gold mines in the Eastern Goldfields region of Western Australia.

The APA Group is also currently constructing the Yamarna Gas Pipeline, which it expects to use to link the Murrin Murrin Lateral to a new APA Group-owned Yamarna Power Station. The Murrin Murrin Lateral is part of the Eastern Goldfields Pipeline System, which also includes the Eastern Goldfields Pipeline, Gwalia Lateral, Mt Morgans Lateral and Yamarna Gas Pipeline.